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How High Can Oil Prices Rebound? The Driving Force Behind the Rise is Revealed
The clarion call for a rebound in oil prices is sounding. Although there are still differences in the industry's judgment on the market outlook, Brent crude oil futures and U.S. crude oil futures have risen strongly by about $9 in the past four trading days, a cumulative increase of 19%. Most of the industry insiders interviewed by reporters from the Shanghai Stock Exchange believe that oil prices may rebound in short-term technical skills or further fluctuate. In the long term, oil prices are at historically low levels and are expected to rise in the second half of the year. It is the right time to seize the investment opportunity of a rebound in oil prices. Resource-based companies may benefit from this.Throughout January, due to negative impacts such as high inventories and sluggish global economic data and sluggish demand, U.S. crude oil futures prices continued to fall from US$53/barrel to US$44/barrel, hitting a six-year low. However, it only took 4 trading days to regain the lost ground. As of press time, the crude oil price was last quoted at 51.47 US dollars per barrel; Brent crude oil futures prices also followed a similar V-shaped reversal trend, quickly rising from 48.5 US dollars per barrel. It rose to a low of US$58.8/barrel on February 4, a one-day surge of 7.95% on January 30, and a surge of 5.03% on February 3, all of which were sudden intraday increases.
In fact, in the past week, news has continued to spread in the European and American markets. Last Friday, Baker Hughes said that oil companies withdrew 94 drilling rigs from US oil fields in a single week, the largest weekly drop in the past 30 years; US oil refineries went on strike. Crude oil companies such as BP, ConocoPhillips and CNOOC will reduce capital expenditures in 2015 by 15% to 20%.
Zeng Weiqiang, senior manager of crude oil at China Merchants Futures, told a reporter from the Shanghai Stock Exchange that U.S. oilfield drilling rig data hit a historical low and oil companies cut investment, which is expected to improve the oversupply situation. This is the fuse for the surge in crude oil. Prior to this, the basis for the rebound in crude oil - demand improvement has already The emergence of quantitative easing policies in Europe and the easing of Greek debt risks are positive reflections of Europe's economic recovery and are likely to benefit the rise of crude oil.
A Hong Kong private equity person engaged in clean energy investment believes that most of the rebound at this stage is caused by speculator transactions. However, he also admitted that oil prices have bottomed out and will be bullish in the second half of the year. By the time fundamentals support a reversal in oil prices, oil prices will have rebounded by less than half.
Data from the U.S. Commodity Futures Trading Commission showed that fund managers reduced their net long positions in West Texas Intermediate oil for the second consecutive week in the week ended January 27, with short positions reaching the highest level since 2010. However, Phil Frain, senior market analyst at Price Futures Group, believes that "momentum is now starting to be bullish." He said, "Reduced drilling and spending will significantly reduce oil production later this year and into next year."
Affected by external factors, the domestic market also received good news. Data from monitoring agencies such as Zhuochuang Information show that since last weekend, the cumulative price increase of Shandong Dilian No. 93 gasoline has exceeded 1,200 yuan/ton, and the price of diesel has increased by more than 600 yuan/ton, which is an astonishing increase.
The reason is that on the one hand, mid-stream and downstream companies are actively stocking up before the holiday. More importantly, international crude oil futures continue to close higher, with a cumulative increase of nearly 20% in four days. Driven by crude oil, the domestic refined oil market has experienced a decline since July last year. The first upward revision of expectations since late December has given a strong boost to the domestic refined oil market.
February 9 is the last round of price adjustments for domestic refined oil products before the Lunar New Year. Many institutions predict that the domestic refined oil market may see its first price increase after experiencing the longest thirteen consecutive declines in history. As of February 4, Beijing time, Zhongyu Information estimated that the crude oil change rate was 5.78%, and the retail price of refined oil is expected to increase by 155 yuan/ton at 0:00 on February 10. If the current crude oil price continues until the end of this pricing cycle, the final increase is expected to be widened to 260 yuan/ton.
Treasure Island also believes that given that the current rate of change is relatively large and it is difficult for crude oil to fall deeply in the short term, the rate of change may maintain positive high fluctuations. Domestic refined oil prices will rise next Monday for the first time since July 22, 2014. This round of increases is initially expected to range from 150 to 180 yuan/ton, which will provide support to the domestic refined oil market.
Looking to the future, most industry insiders interviewed by reporters from the Shanghai Stock Exchange believe that oil prices may rebound in short-term technical skills or further fluctuate. In the long term, oil prices are at historically low levels, and are expected to rise in the second half of the year. It is the right time to seize investment opportunities when oil prices rebound. Many brokerage institutions have suggested taking advantage of the correction to advance stocks that will benefit from the rebound in oil and gas. The opportunities are mainly in the oil and gas resources and oil services sectors; shale gas theme stocks and private companies with overseas oil and gas.
According to a person from the securities department of Midu Energy Company, under the current international oil prices, the company's oil field exploration has suffered a slight loss. The company is currently doing a non-public offering. After the funds raised are replaced with bank loans, the financial costs are expected to drop, and the cost can be reduced to 45. USD/barrel. And the company is optimistic that oil prices will rebound to a reasonable level in the later period. A person from Jerry Holdings said that due to fluctuations in international oil prices, the company's previous decision to sell an overseas exploration block has been temporarily shelved, waiting for the right opportunity after oil prices rebound. At the same time, the company is also strengthening the development of overseas customers.
From a disk perspective, driven by the continued surge in oil prices, non-ferrous metals such as London copper and photovoltaics and other new energy-related products also took advantage of the trend to rise sharply on the 4th. Among them, Canadian Solar soared by 25.19%, and other Chinese photovoltaic concept stocks generally rose by more than 7%. In addition, Ping An Securities research report analysis suggests that attention should be paid to the PTA-polyester industry chain, where inventories are at low levels, the industry is weakly recovering, and downstream bargaining power is gradually increasing, as well as the methanol and new energy vehicle industry chains.
"This is the first wave of European factors, and we will look at Chinese factors next." Zeng Weiqiang said that crude oil may continue to fall in the short term, but it is unlikely to fall below 40 US dollars per barrel. Overall, crude oil prices in the first quarter were on the higher side. , being bullish in the second quarter mainly depends on China’s economic recovery.
However, international investment banks such as Barclays and Goldman Sachs still expect that oil prices will fall further in the coming months. New York WTI crude oil and Brent oil prices may fall to more than 30 US dollars, and then rebound to the level of 65 to 70 US dollars. Barclays The average WTI price this year is forecast to be $42.
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